Finance Dave
Thinks s/he gets paid by the post
- Joined
- Mar 29, 2007
- Messages
- 1,864
Your post is an example of how people adjust and substitute as a result of inflation. You have been impacted, as your post shows:
1) Refinanced the mortgage. That is awesome, but an activity that is unrelate to inflation. (And an activity that no longer makes sense for most mortgages today as refinance rates are much much higher). That is, it was the proper decision regardless of the change in prices (i.e. inflation). It also is an example of an economic activity that has been severely curtailed - many of those folks processing refinances have either or will find themselves out of a job.
2) "DH switched where he got his hair cut" - this is an example of substitution to a cheaper/lesser quality good/service. If you would say "But the haircut is just as good", then why didn't he do the switch before. So there was either a reason he used the previous place (quality of haircut, pleasantness of the place, closeness to home, attractive hair-cutter, whatever) or it was just not important enough to change, and inflation (in general) was enough to get him/you to look at expenses carefully to see what could be substituted "easily".
3)"we dropped local TV channels" - another example of traditional economic behavior of a normal good when prices increase (or even stay the same but prices increase on other goods). You are in fact going with less here. Now you may argue "we didn't watch them" or "we don't miss them" which is good, but the fact remains the same that you are decreasing purchasing due to inflation.
4)"dropped some museum and park passes we weren't using too much" - similar situation with #3
5)"cut my own hair and stopped having it dyed" - again, similar to #2. Again, you are substituting your own labor/time to do your hair vs. the pleasure? of having it done in a salon. Once more, I am not saying this is bad - perhaps you've like it better and get more satisfaction. All I am stating is that this is an example, similar to "I make my own coffee at home instead of going to Starbucks".
These kinds of changes are going on all throughout the economy. That hair stylist(s) that used to get your big $ and hubbies $ now doesn't get those. That has impacted their possible earnings, and their spending will need to be reduced. The local TV companies get less money (less $ from cable or local advertisers). And so on.
None of what I'm babbling on here is in anyway meant to dissuade you or others from doing these things - they are natural reactions to higher prices. All that I am stating is that even in these cases, inflation has had an impact on behaviors and those behavior changes impact the economy.
+100, but you’ll never convince some people, so ….